India likely to report higher GDP growth estimates for 2023/24

By Manoj Kumar

NEW DELHI (Reuters) – India is likely to project higher economic growth estimates of around 7% for the 2023/24 fiscal year ending in March, compared with earlier government forecasts when the National Statistical Office releases its first advance GDP estimates on Friday.

An increased estimate of annual gross domestic product is widely expected after the Reserve Bank of India (RBI) revised its own growth forecast last month to 7% for the current fiscal year, from an earlier estimate of 6.5%.

The advance estimates of GDP, which go under six revisions over time, will be released on Friday at 1200 GMT.

The central bank’s revised growth forecast of 7% for 2023/24 was a “conservative estimate” considering robust growth reflected in high-frequency indicators data for October and November, Michael Patra, RBI’s deputy governor said last month.

Prime Minister Narendra Modi has increased state spending on infrastructure projects to bolster economic growth amid sluggish consumer spending, which, analysts said, is likely to help him win a third term in the national election scheduled before May.

The Indian economy grew faster than expected 7.6% year-on-year in the September quarter, after growing 7.8% in the previous quarter, prompting many private economists to upwardly revise their yearly estimates.

Among others, S&P Global Ratings expects India will remain the fastest-growing major economy for the next three years, setting to become the world’s third-largest economy by 2030.

S&P expects India, currently the world’s fifth-largest economy, to grow at 6.4% this fiscal and estimates growth will pick up to 7% by fiscal 2027.

In contrast, it expects China’s growth to slow to 4.6% by 2026 from an estimated 5.4% this year.

Economists said the RBI’s monetary policy committee (MPC) is unlikely to cut the benchmark policy rate of 6.5% for the next few quarters amid the risk of a spike in food inflation in the election year.

(Reporting by Manoj Kumar; Additional reporting by Swati Bhat in MUMBAI; Editing by Alison Williams)